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Start with an apples-to-apples comparison
Large electricity users can look similar on a planning map while creating very different demands on a local system. A data centre may run a fairly steady digital workload; a factory may have shifts and maintenance outages; a mine or industrial plant may have a large motor load; a farm may be seasonal. The correct question is not which category wins in the abstract, but what this particular project will require and what the community receives in return.
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Use one accounting boundary for every option. Do not compare a facility’s nameplate capacity with another facility’s measured consumption, or a national estimate with a local bill. Label every number as actual, contracted, permitted or projected, and attach its geography, date and scenario.
| Question | What to measure | Evidence to request |
|---|---|---|
| How much electricity? | Expected peak demand in megawatts (MW), annual energy in megawatt-hours (MWh) or terawatt-hours (TWh), and utilization. | Load forecasts with low, base and high cases; interval data for operating sites; the same meter boundary for each comparison. |
| When is it used? | Steady, seasonal or peaky demand; expected growth schedule; emergency operating profile. | Hourly or seasonal load shapes, commissioning dates and contractual curtailment terms. |
| What grid work is needed? | Generation, transmission, substations and distribution upgrades, plus their timing and cost. | Utility studies, interconnection agreements and a written allocation of costs if the project is delayed or cancelled. |
| What are the site impacts? | Direct water use, supply constraints, cooling, land, construction disruption, noise and backup generation. | Site-specific water balance, permits, construction plans, noise analysis and generator-emissions records. |
| What emissions result? | On-site fuel emissions and emissions associated with purchased electricity under local hourly or seasonal conditions. | Fuel-use estimates, electricity-supply contracts and an explanation of how renewable claims are matched to actual consumption. |
| What public value is enforceable? | Taxes under current law, incentive value and duration, permanent and construction jobs, wages and other commitments. | Signed agreements, statutory tax treatment, clawbacks, reporting duties and independent verification. |
These comparison axes reflect the issues identified in U.S. Department of Energy large-load rate-design work, Federal Energy Regulatory Commission (FERC) proceedings, the U.S. Energy Information Administration’s Texas analysis and the Electric Power Research Institute’s community framework: DOE rate design, FERC large-load action, EIA Texas analysis and EPRI community framework.
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Separate peak demand from annual energy
Peak demand answers “How much capacity must the grid be ready to deliver at one time?” Annual energy answers “How much electricity is consumed over a year?” A project can have a high peak but relatively low utilization, or a lower peak that runs nearly continuously. Both measures are necessary.
National data-centre figures are scenarios, not a local forecast
A U.S. Department of Energy announcement dated December 20, 2024, summarizing a 2024 Lawrence Berkeley National Laboratory report, estimated that data centres used 176 TWh in 2023, about 4.4% of U.S. electricity. The same announcement gave a scenario range of 325–580 TWh by 2028, or 6.7–12% of U.S. electricity. Those are national totals and modeled scenarios, not a prediction for a particular utility or proposed campus. See the DOE announcement.
A later Lawrence Berkeley National Laboratory report record gives a modeled range of 9.5–15.3% of U.S. electricity by 2030. It is a later update with a different forecast period; do not draw a single trend line by joining the 2028 and 2030 ranges as if they were one continuous estimate. The record is available from the Office of Scientific and Technical Information.
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In a September 2024 analysis, EIA defined an ERCOT “large flexible load” as a facility with expected peak demand capacity of at least 75 MW. Under its baseline assumptions, EIA forecast 54 billion kWh for those customers in 2025. The article explicitly noted uncertainty about whether queued projects would actually come online. That figure covers a Texas customer category, not measured national data-centre consumption and not data centres alone. Read the EIA analysis for the assumptions.
For a local proposal, require the developer and utility to show:
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- Peak MW at each construction phase and at full build-out.
- Annual MWh or TWh under low, base and high utilization cases.
- The date each block of load is expected to arrive, including delay and cancellation cases.
- Whether the forecast is behind one meter, across a campus, or net of on-site generation.
- Actual interval data from comparable operating facilities, with confidentiality limits identified.
Examine timing, flexibility and reliability
A steady load can improve utilization of existing infrastructure, but it also leaves less room during a tight supply period. A peaky load may need more capacity for only a few hours. The practical distinction is whether the customer can reduce demand when the grid is stressed, how quickly it can do so, and what it is paid or required to do.
Ask for a real curtailment obligation
Do not treat the word “flexible” as a benefit by itself. Request the maximum reduction in MW, notice time, duration, annual event limit, restart constraints, testing rules, penalties and payment. Confirm whether curtailment is voluntary, interruptible under a tariff, or enforceable under a service agreement.
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EIA reported that some large-load facilities in ERCOT—mainly cryptocurrency miners, but also data centres and some industrial factories—had voluntary agreements to reduce consumption during high-demand periods or when generator availability was low. That practice is not a universal rule for other utilities. Ask whether the proposed project has a comparable arrangement and what it actually requires. The relevant case description is in the EIA Texas analysis.
Test reliability in both directions
Model the project’s effect when it runs as expected and when it does not. A delayed campus can leave a utility with underused substations or contracted generation. A faster-than-expected build-out can create a resource-adequacy problem. The comparison should show who bears each risk and what happens to reserved capacity if the load shrinks, moves or never materializes.
Trace grid-connection costs and rate risk
Large-load approval is also a cost-allocation decision. Identify every proposed transmission line, substation, transformer, distribution upgrade, generation contract and study. Then identify the customer contribution, utility contribution and amount that could be recovered from other ratepayers.
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DOE’s January 2025 brief highlights four questions for large-load rate design: whether system costs are allocated fairly rather than shifted to other customers; whether utilities face financial risk from investments that become underused; whether resource adequacy keeps pace with demand; and whether rules should address carbon-free matching or on-site generation. These are questions for the utility and regulator, not evidence that a specific project has already increased everyone’s bill. The brief is at DOE’s electricity rate-design page.
Understand the federal rulemaking status
On June 18, 2026, FERC directed each of six regional grid operators under its jurisdiction to justify or reform rules affecting data centres, manufacturing facilities and other large energy users. Listed topics include faster and more transparent transmission-service applications and studies, transparent transmission costs and avoidance of cost shifting, co-location and behind-the-meter generation, transmission service for flexible large loads, and study of generation serving electrically proximate or co-located loads.
This is an active federal proceeding, not a final uniform national tariff. Check the current regional rules before stating what a particular project must pay. FERC Chairman Laura V. Swett described the agency’s stated goal: “We are setting the stage for a resilient, reliable, and forward-thinking grid that empowers communities and safeguards consumers by transforming the way large energy users access the grid.” The quotation is a statement of intent, not proof that a project will deliver that outcome. See the FERC release.
Put protections in the contract
A community agreement can require deposits, milestone payments, minimum demand charges, take-or-pay commitments, security for stranded-asset risk, and payment of directly caused interconnection work. It can also define what happens if construction slips or the customer exits. A forecast alone is not a cost guarantee.
Compare water, land and operating impacts locally
Water use depends on cooling design, weather, operating load and the source of make-up water. Compare direct consumption and peak withdrawals with the actual basin, municipal system or aquifer serving the site. A national data-centre estimate cannot answer whether this location has water available during a drought.
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Request a site-specific water balance that separates potable water, reclaimed water, process water, evaporative losses, discharge and emergency supplies. Compare it with other candidate users under the same drought and seasonal assumptions. Verify permits, conservation conditions and reporting frequency.
The physical comparison should also cover:
- Land area, impervious surface, habitat or farmland conversion and storm-water controls.
- Construction traffic, road work, dust, noise, lighting and schedule.
- Cooling towers, treatment chemicals, wastewater capacity and discharge limits.
- Backup generators, fuel storage, testing hours and local air-permit requirements.
- Substation and transmission corridors, visual effects and setbacks.
EPRI’s community framework presents both potential local economic support and increased electricity, water, construction and operating disruption as dimensions to investigate. Neither the benefits nor the harms are automatic. Use the EPRI executive summary as a prompt for a location-specific assessment.
Separate direct emissions from electricity-related emissions
Count fuel burned on site separately from emissions associated with purchased electricity. Backup generators may operate rarely yet still require permits and testing. Purchased electricity can have different emissions by hour and season depending on the local generation mix and congestion.
A renewable-energy contract or certificate can describe the customer’s procurement, but it does not by itself describe every physical or hourly effect on the local grid. Ask what is matched to consumption, at what interval, in which balancing area, and what generation serves the load when the contracted resource is unavailable. Apply the same accounting method to a factory, mine, farm or other alternative.
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Test taxes, jobs and incentives against enforceable evidence
Public value should be measured under current law, not only in a developer’s projection. Compare expected tax revenue, incentive value and duration, infrastructure obligations, permanent operating jobs, temporary construction jobs, wages and clawbacks. Distinguish signed commitments from estimates and reported outcomes from claims.
What the Washington example does—and does not—show
Washington’s Joint Legislative Audit and Review Committee (JLARC) reviewed a sales-and-use-tax preference in three urban counties. It estimated beneficiary savings of $42.4 million over 2023–26. Beneficiaries reported 53 family-wage jobs and nearly 300 temporary construction jobs. JLARC said no new urban data centres had been built under that pilot at the time of review and described future job creation as uncertain. These figures apply to that specific policy and cannot serve as a jobs-per-facility average. The review is at Washington JLARC.
JLARC also identified a measurement problem: the reviewed data centres were not required to report electricity use in a form that allowed actual utility use and taxes paid to be compared over time. JLARC estimated electricity use for four eligible facilities at about 427,000 MWh, or 1.4% of sales by the two utilities serving them in 2024. That is a scoped estimate, not a general data-centre load factor. Ask the local agency what will be measured, what is confidential, who verifies the figures and how long reporting continues after an incentive or permit is granted.
Make benefits conditional
Useful commitments specify job counts, wage floors, apprenticeship participation, local procurement, tax payments, water reporting and construction deadlines. Include audit rights, public reporting and clawbacks when the promised investment or employment does not occur. A projected benefit without a remedy is not equivalent to an enforceable benefit.
Use a repeatable approval process
- Define the comparison set. List the proposed data centre and plausible alternative large users, then set one geography, time horizon and meter boundary.
- Publish the load cases. Show peak MW, annual MWh, utilization, hourly shape and each build phase. Label actual, contracted and projected values.
- Obtain an independent grid study. Identify transmission, generation, substations and distribution work, schedule, cost allocation and the consequence of a delayed or cancelled load.
- Specify flexibility. Put curtailment MW, notice, duration, events, compensation and verification in the tariff or contract; do not rely on an informal promise.
- Complete site assessments. Compare water balance, drought conditions, land, construction, noise, backup generation and emissions with the alternatives using local data.
- Audit public finance. Calculate taxes under current law, incentive value, infrastructure spending and operating costs. Separate one-time construction activity from permanent jobs.
- Write enforceable conditions. Add milestones, deposits, minimum charges, reporting, independent verification, clawbacks and a remedy for nonperformance.
- Recheck after approval. Require periodic reports on actual MW, MWh, water, emissions, jobs, taxes and curtailment, and compare them with the approved case.
Questions for each party
Ask the developer
- What is the maximum coincident demand at each phase, and what is the expected annual energy at low, base and high utilization?
- Which workloads can be paused, for how long and under what payment or penalty?
- What cooling system, water source, withdrawal limit and discharge profile will be used?
- How many permanent jobs, construction jobs and apprenticeships are committed, and what wages are guaranteed?
- What happens if the campus is delayed, downsized, sold or never fully occupied?
Ask the utility and regulator
- Which upgrades are caused by this load, and who pays for each one?
- What deposits, minimum bills or collateral protect other customers from stranded investment?
- How does the project affect resource adequacy, reserve margins and emergency procedures?
- What data will be public, what will be confidential and who will audit it?
- Which tariff and regional rules apply now, and which are still under review?
Ask local water, planning and tax agencies
- Is supply adequate in a dry year, and what other users would face constraints?
- What permits cover land, noise, air emissions, generators, traffic and wastewater?
- What taxes would be collected under current law before incentives, after incentives and if the project misses milestones?
- When will the public receive verified operating and fiscal reports?
Common comparison mistakes
- Using only annual energy. This hides the capacity needed for the highest-demand hour.
- Using only peak MW. This hides total yearly consumption and utilization.
- Mixing dates and geographies. A 2023 national total, a 2025 Texas forecast and a 2026 local permit are not one data series.
- Treating a queue as a built project. Queued load can be delayed, reduced or cancelled.
- Calling voluntary flexibility guaranteed. Only a documented, measurable obligation provides a planning assumption.
- Substituting national water figures for local analysis. Basin conditions, cooling technology and reclaimed-water access determine local risk.
- Counting projections as outcomes. Jobs, taxes and energy use should be reported after verification, not only in applications.
- Assuming a renewable claim settles emissions. Check hourly supply, balancing-area conditions and on-site fuel separately.
What the evidence can support
The available U.S. evidence supports a disciplined comparison, not a universal verdict. National data-centre consumption is large and modeled to grow, but those scenarios do not predict an individual project. Texas shows that some large loads can offer curtailment, but the arrangement is not standard everywhere. Washington shows why incentive savings, jobs and electricity-use reporting must be checked against local rules and data quality.
A defensible decision therefore compares the proposed facility with alternatives on identical measures, assigns grid and water risks explicitly, and makes public benefits enforceable. If a proposal cannot provide those numbers or commitments, the uncertainty itself belongs in the approval record.
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